Credit Basics

A good credit history is an essential part of financial health. It helps you to  easily get the credit you need at the best possible interest rate and in quick time. Obtaining a good interest rate can save you a lot of money when shopping for a car, home, marriage, education. small business or other major purchase. Having good credit also gives you greater options in choosing a loan, especially on the Internet where lenders compete for the business of credit consumers. A good credit history can even help you get a good loan. A good credit can make much of your personal and professional life easier.

When you obtain credit or a loan, the lender looks at your credit history and repayment history. This repayment history forms the basics of your credit report. 

The most important rule for maintaining good credit is to pay your bills on time! as well as managing your debt so it doesn't get out of hand. It is not only important to pay on time, it is also wise to be sure you can afford to make the payments to pay off the debt. Keeping a lid on spending helps prevent your debt from accruing to an amount you find difficult to manage or cause you to pay more interest than is necessary.

A general rule of thumb is to spend no more than a third of your income on all debt, including mortgages, credit cards and consumer loans. Poorly managed credit can take you deeply into debt and can lead to missed payments and a damaged credit rating.

If you use credit responsibly, you will have the added flexibility and security of credit at your disposal. You will be able to improve your lifestyle through purchases that are usually only possible with credit (like buying a home), utilize services that are sometimes only available if you have a good credit (like renting a car), and have the peace of mind to cover unexpected emergencies.

If you abuse your credit, you may have to pay much more for credit in the future, or you may be unable to purchase the goods and services you want and need.

What exactly is a Credit Report?

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